This is a randomized, parallel, double-blind placego-controlled multicenter trial. Subjects will be randomized to receive either lamivudine, orally administered at 3mg/kg or placebo (control group) in the ratio 2:1. Treatment duration for all subjects will be 52 weeks. The study objectives are to compare the efficacy of lamivudine versus placebo in children with chronic hepatitis B with regard to i) complete virologic, and ii) sustained normalization of serum alanine aminotransferase (ALT) levels at Week 52, and to compare the safety of lamivudine versus placebo in children with chronic hepatitis B. Approximately 255 evaluable subjects (male and female, greater than or equal to and less than 18 years of age, with chronic hepatitis B), will be randomized at up to 50 investigational centers in the United States, Canada, Europe and South American. Subjects will be eligible as determined by protocol inclusion /exclusion criteria. The promary efficacy endpoint of this study is complete virologic response (loss of detectable BHeAg from serum and reduction of HBV DNA in serum to undetectable levels). The most important secondary endpoint is sustained normalization of serun ALT. Other secondary endpoints include: HBeAg seroconversion; sustained HBV DNA response; HBsAg loss and HBsAg seroconversion; and safety comparisions of clinical adverse events and teh incidence of graded laboratory abnormalities.